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Wineries and Vineyards Tax Credit (WVTC)

​​​​​​​​WVTC provides an income tax credit for qualified capital expenses related to a Maryland winery or vineyard. 

BENEFITS

A Maryland Winery/Vineyard may be qualified for an income tax credit equal to 25% of qualified capital expenses. Total credits granted may not exceed $500,000 in a year. If the total amount of credits applied for exceeds $500,000, the credit will be prorated among the certified applicants.

ELIGIBILITY

A qualified winery is defined as an establishment licensed by the Comptroller of Maryland as either a Class 3 or Class 4 winery. 

A qualified vineyard is defined as agricultural lands located in Maryland consisting of at least one contiguous acre used solely to grow grapes and other plants that will be used in the production of wine by a winery licensed by the Comptroller of Maryland.

Qualified capital expenses must be made in connection with the establishment of new wineries or vineyards, or capital improvements made to existing wineries or vineyards in Maryland.

"Qualified capital expenses" include expenditures made by the taxpayer for the purchase and installation of equipment or agricultural materials for use in the production of agricultural products at a vineyard or in a winery. Qualified capital expenses do not include the cost of construction or installation of buildings or structures. Specifically, qualified capital expenses include:

  • Barrels
  • Bins
  • Bottling equipment
  • Canopy management machines
  • Capsuling equipment
  • Chemicals
  • Corkers
  • Crushers
  • Destemmers
  • Fermenters or other recognized fermentation devices
  • Fertilizer and soil amendments
  • Filters
  • Fruit harvesters
  • Fruit plants
  • Hoses
  • Irrigation equipment
  • Labeling equipment
  • Lugs
  • Mowers
  • Poles
  • Posts
  • Presses
  • Pruning equipment
  • Pumps
  • Refractometers
  • Refrigeration equipment
  • Seeders
  • Soil
  • Small tools
  • Tanks
  • Tractors
  • Vats
  • Weeding and spraying equipment
  • Wine tanks
  • Wire

APPLY

For a winery or a vineyard to claim a tax credit, an individual or corporation on behalf of the winery or vineyard must apply to and be certified by the Maryland Department of Commerce (Commerce). The winery or vineyard must submit an application to Commerce by September 15th following the tax year in which the costs were incurred. By December 15th of that year, Commerce will certify the approved amount of credit. The applicant will be required to file an amended Maryland income tax return to claim the credit and attach a copy of the Commerce certification.

The total Maryland Wineries and Vineyards Tax Credit approved by Commerce may not exceed $500,000 for any calendar year. If the total amount of credits applied for by all businesses exceeds $500,000, the credits will be approved on a pro-rata basis. The excess credit may be carried forward for 15 years.

Tax Year 2016 applications must be sent to Commerce and postmarked by September 15, 2017.

WVTC Application Materials

RESOURCES

CONTACT

For more information about WVTC contact::
Emiko Kawagoshi, Tax Specialist
Maryland Department of Commerce, Office of Finance Programs
410-767-4041
877-821-0099

Mark A. Vulcan, Director, Tax Incentives
Maryland Department of Commerce, Office of Finance Programs
410-767-6438
877-821-0099

FREQUENTLY ASKED QUESTIONS

  • What is the Maryland Wineries and Vineyards Tax Credit?
    • ​Maryland's Wineries and Vineyards Tax Credit program provides income tax credits to business that incur qualified capital expenses made in connection with the establishment of new wineries or vineyards, or the capital improvements made to existing wineries or vineyards in Maryland. The business may apply for tax credit in an amount equal to but not more than 25% of incurred costs. The total amount of credits awarded to each business depends on the amount of eligible expenses and costs incurred with a limit of $500,000 for all businesses that apply. If the total amount of credits applied for exceeds $500,000 in a year, the credit will be prorated among the certified applicants. Tax credits are more valuable than deductions because credits are subtracted directly from income tax liability.

  • Who may apply for the Maryland Wineries and Vineyards Tax Credit?
    • A qualified Maryland winery or Maryland vineyard that has qualified capital expense may apply for this tax credit.

      A Qualified Maryland Winery is defined as an establishment located in Maryland and is licensed by the Comptroller of Maryland as either a Class 3 or Class 4 winery.

      A Qualified Maryland Vineyard is defined as agricultural lands located in Maryland consisting of at least 1 contiguous acre dedicated to the growing of grapes used in the production of wine by a winery as well as any plants or other improvements.

  • What are the qualified capital expenses?
    • ​The "Qualified Capital Expenses" are all expenditures made by the business for the purchase and installation of equipment or agricultural materials for use in the production of agricultural products at a vineyard or in a winery. Qualified capital expenses include:

      • Barrels
      • Bins
      • Bottling equipment,
      • Canopy management machines
      • Capsuling equipment
      • Chemicals
      • Corkers
      • Crushers
      • Destemmers
      • Fermenters or other recognized fermentation devices
      • Fertilizer and soil amendments
      • Filters
      • Fruit harvesters
      • Fruit plants
      • Hoses
      • Irrigation equipment
      • Labeling equipment
      • Lugs
      • Mowers
      • Poles
      • Posts
      • Presses
      • Pruning equipment
      • Pumps
      • Refractometers
      • Refrigeration equipment
      • Seeders
      • Soil
      • Small tools
      • Tanks
      • Tractors
      • Vats
      • Weeding and spraying equipment
      • Wine tanks
      • Wire

  • What are NOT included in the qualified capital expenses?
    • ​Utilities, labor costs, service costs, repair costs, maintenance costs, construction costs, and general supplies are NOT qualified expenses.

  • How much credit may a business receive?
    • ​Businesses may apply for an income tax credit in an amount equal to 25% of the qualified capital expenses. If total credits applied for exceed $500,000 for a calendar year, the Wineries and Vineyards Tax Credit is prorated.

  • How can a business prove eligible wineries and vineyards capital expenses?
    • A business must complete the "Report of Expenses" with supporting documents as an attachment to the application.

      The business entity must retain a copy of any supporting documents of these costs for its records. Those supporting documents include proof of equipment and/or materials purchases, such as receipts and invoices from the store and/or company where the purchase was made or other supporting documentation.

  • How does a business know if it can claim the Wineries and Vineyards Tax Credit?
    • Business Certification Requirement: A business must be certified as a qualified business entity that is eligible for the tax credit. Applications for certification are available from the Maryland Department of Commerce website. The business must submit an application and report of expenses along with the supporting documents to Commerce by September 15th of the calendar year following the end of the taxable year in which the expenses were incurred. Commerce ​will review the application package and will certify to the taxpayer the amount of tax credit that the taxpayer may claim by December 15th of the same year.

      Detailed "Report of Expenses" Requirement: A business must provide a detailed report of expenses of the qualifying wineries and vineyards capital expenses in Maryland with supporting documents of the proof of purchase.

  • What if a business does not have enough income tax liability to use all of the credit?
    • ​If the Wineries and Vineyards tax credits exceed the tax imposed for that year, the credits may be carried forward for 15 years.

  • How does a business claim the Wineries and Vineyards Tax Credit?
    • Maryland Tax Form 500CR is used to claim this credit. The business must file an amended tax return with the Comptroller of Maryland for the year in which the expenses were incurred and attach a copy of the certification from the Maryland Department of Commerce. Also, note that the credit is taken against the state income tax only. It is not taken against the county income tax "add-on."

      More information for tax forms and tax return instructions, please visit the Comptroller of Maryland website.

  • What records must a business maintain?
    • ​The business, in accordance with standard tax record procedures, must maintain information on the expenses claimed for the credits as well as supporting documents for the proof of purchases and payments.

  • Is business information submitted to the Department confidential?
    • ​Generally yes, subject to the provisions of the Maryland Public Information Act and the Maryland Code, Tax-General Article, Title 13, Subtitle 2. In addition, the company consents to the release of certain information in the tax credit application.

  • How long does the Wineries and Vineyard Tax Credit program last?
    • ​The credit is available for eligible expenses and costs for taxable years beginning after December 31, 2012, but before July 1, 2018.

  • What is the total Wineries and Vineyards Tax Credit applied for by all businesses exceeds $500,000?
    • ​If applications by all businesses for Wineries and Vineyards Tax Credit exceed $500,000, each credit amount will be calculated by multiplying the credit applied for by the following fraction: $500,000 divided by the total value of credits applied for by all applicants. For example, if the credit amount that the business is applying for is $50,000 and the total amount of credits applied for by all business is $2 million; it will be eligible for $12,500.

  • Who should I contact with more questions?